When Can We Expect A Profit From Applied Blockchain, Inc. (NASDAQ:APLD)?

We feel now is a pretty good time to analyse Applied Blockchain, Inc.'s (NASDAQ:APLD) business as it appears the company may be on the cusp of a considerable accomplishment. Applied Blockchain, Inc. designs, develops, and operates datacenters in North America. The US$179m market-cap company’s loss lessened since it announced a US$22m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$13m, as it approaches breakeven. Many investors are wondering about the rate at which Applied Blockchain will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

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Applied Blockchain is bordering on breakeven, according to the 6 American Software analysts. They expect the company to post a final loss in 2023, before turning a profit of US$51m in 2024. The company is therefore projected to breakeven around 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 111% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Applied Blockchain's growth isn’t the focus of this broad overview, but, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 19% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Applied Blockchain, so if you are interested in understanding the company at a deeper level, take a look at Applied Blockchain's company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:

1. Valuation: What is Applied Blockchain worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Applied Blockchain is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Applied Blockchain’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.